There are any number of reasons you may need a short-term loan. When considering your options, there’s one loan you should approach with caution: a payday loan. A payday loan is typically a short-term, high-cost loan, generally of $500 or less, which you typically must pay back on your next payday. One reason people choose a payday loan is that, in many cases, no credit check is required.
While it sounds good in theory, in many cases, it doesn’t pay to get a payday loan. You could pay $10 to $30 for every $100 borrowed. On a $500 loan, that could be as much as $150 in fees. A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400 percent! And that’s if you pay the loan back on time. If you don’t, in a very short amount of time, you could owe more in fees and interest than the amount of your original loan. It’s little wonder these types of loans are called “predatory loans.” And why the Consumer Financial Protection Bureau is trying to tighten regulations around them.
If you need money for an emergency, or to help you take care of expenses until the next payday, you have options other than a payday loan. Here are three.
- Use your credit card: The average national interest on credit cards is currently about 21%.* Yes, this is high, but it’s a bargain compared to 400% for a payday loan. If you can, get a low-interest credit card. Our Select Visa® starts at 8.99% APR**. And now, you can get a 0% intro APR for the first 6 months if you qualify. Whatever card you use, it’s important to pay off the balance as quickly as possible to limit how much interest you’ll pay.
- Get a personal line of credit: A line of credit ensures you can access funds whenever you need them most, and the interest is far less than a payday loan. Our Signature Line of Credit gives you peace of mind. You only tap into the money when you need it most. This variable rate loan starts as low as 11.49% APR†.
- Skip a loan payment: If you have a loan with the Credit Union and need a little financial breather, you can skip your next eligible loan payment using our Skip-A-Pay Tool in Tulee. Use the money from the payment you’re skipping to cover any urgent need. It only costs $40 to apply, and you’ll find out if you’re application is approved within 48 hours. To learn more, view these step-by-step instructions or play this video.
Final thoughts.
When a financial emergency hits, it may seem like you have no options. Or that the only option is the most expensive one available. It’s understandable, however, with a little action now when your finances are under control, you can avoid feeling like you’re being backed into a corner later. And, you can save yourself worry and a significant amount of money compared to getting a payday loan. To learn more about our credit cards, personal loans, and Skip-A-Pay Tool, continue exploring our website or call us at 800.877.2345.
*Schulz, Matt; Shepard Dan, “Average Credit Card Interest Rate in America,” Lendingtree.com. 8 July 2024. Accessed 19 July 2024.
**$100 Bonus for New Credit Cards for: Crystal Visa, Select Visa & Visa Platinum: A $100 (one hundred dollars) bonus will be paid in the form of “Visa Statement Credit” when at least $5,000.00 (five thousand dollars) is spent in purchases within the first 3 months (qualifying period) of the “New” Visa card opening. Bonuses will be paid out within 90 days after the qualification period. Example: If a card is activated on January 1, 2021 and the total of qualifying purchases for the months of January, February and March is at least $5,000, the primary borrower will receive a Bonus of $100 (one hundred dollars) no later than July 1, 2021. Limit of one reward/bonus per member number. Qualifying transactions must “post” to the designated account during the qualified period. All qualifying purchases will count towards the $5,000 in spent purchases unless return for credit of any of the qualifying transactions takes place within 90 days of the end of the qualifying period. Transactions may take two business days from the date of purchase to post. Member must be in good standing to be eligible for bonus. New accounts are subject to FIGFCU approval and all other terms and conditions apply. This offer is valid only for individual account /card holders, is non-transferable and cannot be combined with any other offer. The $100 Bonus is a product promotion sponsored by FIGFCU and may be discontinued at any time. Visa is a registered trademark.
+APR = annual percentage rate. Rates are subject to change at any time.
The balance transfer amount from other Farmers Insurance Federal Credit Union credit cards will retain its current rate (i.e., Select Visa at 8.99% – 18.00%, Visa Platinum at 10.99% – 18.00%, until the transferred balance is paid off. APR=Annual Percentage Rate. Rate quoted is the lowest rate possible for qualified borrowers and is subject to change. Qualification is based on credit history, debt, and the ability to repay. Your rate may vary. All loans subject to credit approval. The newly opened Credit Union credit card’s rate will only apply to new transactions. Any balances on the previous Credit Union credit card must be paid off at the prior credit card’s rate.
Zero Percent (0%) Introductory Rate Promotion for purchases, is offered for new FIGFCU Select Visa® Credit Card account holders. This incentive offer, is not available to those members who are opening a new Select Visa and had an outstanding balance or a closed FIGFCU Zero Percent Loan account and/or had any FIGFCU Select Visa® Credit Card within the last year. If you are in an introductory rate promotion period, you are not eligible to transfer other loan balances, line of credit balances, credit card account balances or CASH Advance to take advantage of the introductory rate promotion.
The program promotion may be modified, suspended or cancelled or may be changed at any time without notice and without restriction or penalty. Farmers Insurance Federal Credit Union reserves the right to change the promotion rates and program retention period from time to time. You will be notified of any expiration or program changes as required by law. Contact Farmers Insurance Federal Credit Union for details on applicable conversion to current rate and payment options which are then in effect. At Farmers Insurance Federal Credit Union’s sole discretion, the program offering of the program may be terminated, for any reason, including but not limited to a “Rules Violations”, your Farmers Insurance Federal Credit Union account is not in good standing or is suspected of fraud, or if you move to another Farmers Insurance Federal Credit Union credit card.
This program is void where prohibited or restricted by law. You are responsible for any federal, state, or local taxes.
Effective Offering Dates: Promotion period for Zero Percent (0%) introductory is effective for FIGFCU Select Visa® Credit Cards opened beginning July 20, 2020 through “until further notice”.
Loss of Introductory APR: We may end your introductory APR and/or apply the Penalty APR if you make a late payment or are Over limit.
Billing Rights: Information on your rights to dispute transactions and how to exercise those rights is provided in the Billing Rights section of the Visa® Credit Card Agreement.
Introductory rate and incentive offers for Select Visa®, are not available to those members who had an outstanding balance on a preexisting or closed FIGFCU Visa Credit Card account and/or had an FIGFCU Visa Credit Card within the last 12 (twelve) months. If you are in an introductory rate promotion, you are not eligible to increase limits until the introductory rate promotion has expired.
TERMS AND CONDITIONS The introductory Annual Percentage Rate (APR) Zero Percent (0%) will apply to purchases made during a promotional period of 6 (six) months from the date of opening of your Visa account. After this promotional period ends, 6 (six) months from the date of activation of your Visa account, your standard APR will apply to any remaining balance and to all new purchases and balance transfers. The terms of this introductory rate may not be applied to existing Farmers Insurance Federal Credit Union Visa accounts.
This promotional introductory offer is based on meeting Farmers Insurance Federal Credit Union’s criteria for creditworthiness. Farmers Insurance Federal Credit Union will review your credit and employment history and any other information permitted by law to process your application. The credit line on this account will be determined after a credit review of your application by Farmers Insurance Federal Credit Union and will be based on various factors, including income. FIGFCU maintains the right to not open this account if: a) the information provided is incomplete, inaccurate or cannot be verified, or if you do not meet Farmers Insurance Federal Credit Union’s standards for creditworthiness; b) your name and/or mailing address on the credit application have been altered; c) the income you reported on the application is insufficient to support the opening of this account; or d) you do not meet Farmers Insurance Federal Credit Union’s membership eligibility or “member in good standing” requirements. You have the right to review your credit history by contacting the appropriate credit reporting agencies.
Change in APRs, Fees and Other Terms: Farmers Insurance Federal Credit Union may change the APRs, fees and other terms of your account at any time in accordance with applicable law and the Visa Credit Card Agreement. Factors we may consider in determining whether and how to change your terms include, but are not limited to, a late payment or an extension of credit that exceeds the credit limit, the frequency and severity of defaults and other indications of risk on accounts with Farmers Insurance Federal Credit Union and other creditors. To the extent allowed by law, the change in terms will affect all outstanding balances. If we increase your APRs, the new APRs will apply only to new transactions you make after we notify you of the change in writing unless it is for default in terms as outlined above.
†APR = Annual Percentage Rate. APR is the annual rate of interest that is paid on an investment, without taking into account the compounding interest within that year. Rates are subject to change at any time.
1.00% rate discount is for a minimum of $1,000 monthly ACH Direct Deposit into a Farmers Insurance Federal Credit Union Checking Account and Automatic Payment/Folio Deduction as a repayment method to qualify. Rates are subject to change at any time
